A CONSTRUCTIVE HEURISTIC FOR THE INTEGRATED INVENTORY-DISTRIBUTION PROBLEM

We study the integrated inventory distribution problem which is concerned with multiperiod inventory holding, backlogging, and vehicle routing decisions for a set of customers who receive units of a single item from a depot with infinite supply. We consider an environment in which the demand at each customer is deterministic and relatively small compared to the vehicle capacity, and the customers are located closely such that a consolidated shipping strategy is appropriate. We develop a constructive heuristic to obtain an approximate solution for this NP-hard problem and demonstrate its effectiveness through computational experiments.

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